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April hasn’t been such a good month for sterling, and it looks like Royal Wedding news are doing little to turn those frowns upside down. Will Super Thursday also be a gloomy one?

U.K. manufacturing production (May 10, 9:30 am GMT)

First up, we’ve got the manufacturing production report on Thursday’s London trading session. This tends to lead to some quick intraday moves for sterling pairs as manufacturing accounts for 80% of overall industrial production and serves as a leading indicator for economic health.
Analysts are expecting to see another 0.2% dip in March, though, and the goods trade deficit is projected to widen to $11.4 billion GBP. This could hint at weaker trade activity, adding to factors dampening rate hike expectations for the BOE lately. Then again, the reaction to this release could be limited as traders brace for the bigger catalysts on the same day.

BOE statement, MPC minutes, and Inflation Report (May 10, 12:00 am GMT)

It’s Super Thursday, fellas! Apart from announcing their interest rate decision, the BOE is also set to release the minutes of their monetary policy meeting and their updated economic forecasts in the Inflation Report.
Recall that their earlier statement and MPC minutes turned out to be slightly more hawkish as a couple of policymakers voted to hike right there and then. However, economic data released since then weren’t so upbeat, which suggests that MPC members might need to rethink their optimism.
Besides, the fresh batch of growth and inflation forecasts could provide a better idea of when the central bank might tighten again. Any downgrades could reinforce the view that the BOE might take it slow from here, further weighing on the pound.

Last Week’s Price Review

The pound is THE biggest loser of the week (as of 2 pm GMT), which marks the third straight week of net losses for the pound.

Overlay of GBP Pairs: 1-Hour Forex Chart
Overlay of GBP Pairs: 1-Hour Forex Chart

The pound started the week with a wobble, likely as a continuation of last week’s slide. However the pound quickly regained its footing, likely because of easing Brexit-related fears after the House of Lords voted to back an amendment that will give Parliament the power to block the government from leaving the E.U. without a deal.

Unfortunately for pound bulls, Tuesday rolled around and revealed that the U.K.’s manufacturing PMI dropped hard to a 17-month low of 53.9 in April (54.8 expected, 54.9 previous), which gutted the pound as expectations for a May BOE rate hike evaporated.

The pound later began to find buyers again ahead of the U.K.’s construction PMI report. Although easing Brexit-related fears may have also helped since there were rumors at the time that Theresa May is supposedly “confident” of reaching a deal for a custom union.

Going back to the U.K.’s construction PMI report, that came in better-than-expected (52.5 vs. 50.5 expected, 47.0 previous), so the pound extended its recovery.

However, the would-be rally quickly fizzled out and selling pressure returned when the U.S. session rolled around.

There were no apparent catalysts, but as noted in Wednesday’s U.S. session recap, there were rumors making the rounds at the time that the U.K. cabinet might reject the proposed customs agreement with the E.U.

At any rate, selling pressure on the pound became ever-present after that. And to make matters worse, the U.K.’s services PMI also failed to impress, which attracted additional sellers.

Interestingly enough, the pound was also the biggest loser in the wake of the NFP report. And market analysts were blaming that on the market players favoring the Greenback over the pound as BOE rate hike expectations crumbled.